Here’s our latest interview with a millionaire as we seek to learn from those who have grown their wealth to high heights.
If you’d like to be considered for an interview, drop me a note and we can chat about specifics.
My questions are in bold italics and his responses follow in black.
Let’s get started…
How old are you (and spouse if applicable, plus how long you’ve been married)?
My wife is 50 and I am 60. We’ve been married for 23 years.
Do you have kids/family (if so, how old are they)?
No kids, just an adorable Yorkie Poo.
What area of the country do you live in (and urban or rural)?
We’ve lived 2 blocks from the ocean in coastal Orange County CA for 5 years. We also spent 12 years prior to that in London, and 3 years in Sydney.
What is your current net worth?
Approx. $3.4 million (broken out in next question). I have not included the value of our car, home furnishings, jewelry, art etc.
What are the main assets that make up your net worth (stocks, real estate, business, home, retirement accounts, etc.) and any debt that offsets part of these?
- US Rollover IRA – $850,000
- UK retirement account – $260,000 (was $300K before Brexit vote)
- After tax investment account – $800,000
- Cash $240,000
- Investment home – for sale at $440,000 but we may have to rent it out (debt free)
- Home – $1,000,000 (bought for $811K in 2012, owe $275K @ 2.99% for 12 years)
- $25,000 invested in a friend’s start-up. Will be a home run or a strike out.
What is your annual income?
Prior to being laid off by an avaricious former PC company in 2015 (which bought the company I worked for in 2012) I was making $225K in salary and $50K in annual bonus. When we were acquired I had options that were in the money. PLUS for 3 years I received an annual retention bonus of $105K, and also got 7 months of severance when laid off. All in all, I was incredibly fortunate to make just shy of $2M from 2012-2015.
What is your job (type of work and level)?
I was a mid-level operations director in high tech, with a great deal of international experience.
What is your main source of income (be as specific as possible — job, investments, inheritance, etc.)?
Dividends and my wife’s business of buying, refurbing and selling houses.
What is your annual spending?
Spending this year is $7500 per month, including property taxes.
How did you accumulate your net worth?
My net worth has been driven by a good income, particularly in the last 4 years of my career, stock market investments and a wife who has done very well for us in real estate – both our homes and our property investments. And good fortune.
What have you learned in the process of becoming wealthy that others can learn from (what can others apply to become wealthy themselves)?
I’ve NOT been a believer in mutual funds or ETFs. I like to look at individual stocks and when a find a compelling investment I buy on dips. And hold. In fact, I’d say I’m a great buyer and a lousy seller. Fortunately, I’ve held these shares in excess of 7 years – some for 20! AMZN, BRK.A, MA, CSCO, GOOGL, AAPL, MMM, CRM, AMGN. It all started way back in 1991 when I was living in Austin and saw that a local (avaricious) PC firm had a bad quarter and the shares took a hit. Put $10,000 into it and that investment has pretty much funded all my other investments ever since.
What are you currently doing to maintain/grow your net worth?
Enjoying the Trump Bump and investing in real estate.
Do you have a target net worth you are trying to attain?
My target number is $4 million. When the economy inevitably turns down I plan/hope to be cashed up and have most of my rollover IRA in cash.
What are your plans for the future regarding lifestyle (for instance, will your net worth allow you to retire early, downsize jobs, etc.)?
My wife and I are very well matched in that we live a very modest lifestyle. Plus, we got accustomed to living in less than 900 ft2 during our international years, so we don’t have too much house here in the USA.
I don’t intend to have a boss, a desk or a commute ever again. My three years at the avaricious PC company disabused me of the notion of ever working for anyone else ever again, so my plan is to manage our finances, stay healthy physically & emotionally and work on some later life musical interests I’ve developed.
Is there any advice you have for ESI Money readers regarding wealth accumulation?
Live beneath your means. Stay healthy. Invest in individual shares. Don’t text & drive.
Laurie@ThreeYear says
Thanks for the details. Your advice, “Don’t text and drive” is really good. It’s so incredibly dangerous. That being said, I look forward to the day when self-driving cars make that advice obsolete.
Physician on FIRE says
Having spent 15 of the last 20 years overseas, I’ll bet you have done and seen some amazing things! I’ve got a great job, but it doesn’t let me get away for more than a few weeks at a time. And that’s new since I started working part-time. Before that, it was a week or two.
I’m curious as to whether or not you’re allowed to give blood after15 years in the UK. The Red Cross seems very particular about how much time I’ve spent there (1 week), which was not enough time to pick up the Mad Cow disease.
Congrats on your successes and best wishes to achieving your goal of $4 million and not moving the target once you get there.
Cheers!
-PoF
Life’s a beach says
We’ve never attempted to give blood. Shame on us. It’s something we need to investigate.
Life’s a beach says
Thank you. Life abroad is both rewarding and challenging. If you try to make it into America you’ll be miserable. That said, all those years in Australia & Britain, where nobody has legal access to guns and everybody has access to healthcare, really affected my political beliefs. So the return to the USA had is share of angst. Fortunately we live in California which has relatively similIar beliefs.
Spen says
Wow your making out that the UK is a leper colony. I haven’t seen anything in the media about Mad Cows Disease for years. I would be more concerned about growth hormones being injected into US grown Cattle. Not sure how time comes into the equation. Either you ate tainted meat in that period or you didn’t. OP could have been vegetarian and in 15 years therefore have no exposure.
Life’s a beach says
Huh?
Dollar Policy says
Any suggestions on how to break into the international experience? Where can I sign up to live in London and Sydney?
Congrats on the good stock investing. Crazy how rare it is to hear of someone that doesn’t like use mutual funds and ETFs.
Life’s a beach says
The hardest part is getting that first international opportunity. I was lucky in that my first job out of school was working in a Mexican maquiladora but living in South Texas. Once ya have an international gig on your resume it seems to get you In the conversation when other international gigs become available. My suggestion is that you put out the word you’re interested and take the first one that comes up – regardless of where.
The Grounded Engineer says
Living abroad sounds awesome. I’m assuming the move and the expenses associated with that were covered by the company? I am trying to gut it out in the tech industry for another 3-5 years myself. Hopefully, I can build a nice nest egg and pivot into a less stressful job. It’s funny, this morning I’ve read articles that mentioned three different ways to build wealth – individual stocks, mutual funds and real estate!
Mrs. Adventure Rich says
Very interesting on the individual stock approach… and I love the “great buyer and lousy seller” quote 😉 Good luck to this millionaire as he and his wife head for $4MM and retirement!
Bernz JP says
Congrats! You guys are ready for retirement. The 225k salary plus the 50k bonus was more than average and probably made the difference in reaching that millionaire status. Is your wife working also with a good income? I do like the individual stock approach also. It’s been a great ride for the bulls in the last seven to eight years now. Best to you and your wife.
Josh M says
I also enjoyed the “great buy and lousy seller” quote – but it sounds like you are not taking your own advice and selling and waiting for the “inevitable downturn in the market.” My experience is that no one can consistently time the market. I’m still accumulating wealth so a downturn would help me as well, but on average the market goes up and to the right, so on average waiting for a market downturn is a losing proposition. My 2 cents.
Life’s a beach says
I hear ya! My thinking is to only cash out in the rollover IRA because there are no tax implications. But you’re correct, if I think I’m the one guy who can time the market then I’m a fool. So maybe what I should say is that I want to have 1/3 to 1/2 my rollover IRA is cash and the rest invested.
Paul says
Nice story and it sounds like your life has been a great adventure – your future plans sound even better now you’ve escaped the Man!
One question I do have is your thoughts / plans on guardians / powers-of-attorney later in life (far later!). Out of necessity, my brother and I are handling all of our father’s affairs, and I’m hoping my kids will continue the tradition as needed. Having a future trusted fiduciary certainly isn’t a reason to have kids, but it’s (hopefully) a side benefit. How do you guys plan to address any potential needs?
Thanks for sharing your story
Life’s a beach says
As my wife is 10years younger than I am, my presumption is that she’ll outlive me by a considerable amount. Most of our wealth is more for her than for me consequently.
Jimcalf says
I was interested in the fact that you were able to earn almost $2M in a three year period. Based on your salary and bonuses, it looks like your options added up to around 900k? No doubt the result of many years of collecting options that you finally got to cash out, which is great to see. So many of us collect options that go no where, so really nice to see it pay off for you. I can only image what “option cash out day” felt like. 🙂
Life’s a beach says
I gotta tell ya, I’ve been fortunate. But that $$ came over four years, not three. Options were more like $500K. But we also had great timing to sell our flat in London for a nice gain and bring that money to the USA at a very strong x-rate – and then buy low in the USA in 2012. A perfect storm of good fortune. Then I had a soul crushing job around a bunch of folks who set their hair on fire pretending to add value -but got paid superbly. Then got paid some more to leave. Yikes! Anybody who has done well in life and doesn’t acknowledge some good fortune is not being honest.
Jimcalf says
My wife always says, it’s better the be smart than lucky, but best to be both! I really think we’re all lucky to be in this long bull market. It makes me feel like a genius, and I am in indexes. 😉 I respect your ability to pick individual stocks. I simply do not have the finance expertise to see the forest through the trees when reading annual reports and such.
Jeff B. says
Many people that DCA their investments that don’t sell in a bear market, increase their returns over the years. There really aren’t horribly long bear markets. Maybe two years, with a few years of avearage returns, but those that sell end up losing out on the run back up. The market will go down at some point, but most of us are prepared for it and hope it is less than 10-15% in a year. I don’t see a 30% drop anytime soon.
Sloan Ranger says
Love Millionaire 24’s frankness and corporate nose tweak. Long may he prosper!
Lily @ The Frugal Gene says
*Tells myself* Please be us please be us please be us – in about 20 years time 🙂 A gal can dream!!/hallucinate.
Dave says
Interesting interview. Living in London must have been nice. I visited London last summer and truly enjoyed it. It is interesting that you like individual stocks vs funds. The first person who taught me about investing built his portfolio with individual stocks. Congrats on your success and thank you for sharing your story.
John Bennett says
Not to belittle the efforts and achievements of M24, but I have to say, after 24 interviews, the preference for high earners is obvious. But only one or two of those 24 would qualify as a PAW per Thomas Stanley. I’m not yet a millionaire, and I’m certainly not making a quarter million a year, so I’m not going to speak to the E. But can we get some interviews with people who have killed it on the S and I? The guy sitting next to me at work is 56, wife and two kids, and is a millionaire. His income is probably about $130k a year. Which is still over double the national average!
Jeff B. says
There are plenty of stories of janitors and teachers making $40K leaving millions to a school. They aren’t on many of these blogs so ESI can only use stories of those sending in their information. https://www.cnbc.com/2016/08/29/janitor-secretly-amassed-an-8-million-fortune.html
ESI says
“After 24 interviews, the preference for high earners is obvious.”
EXACTLY!!!!!!
This is why I post so often on growing your career!
And, BTW, the career posts are some of the least-viewed posts on this site (I have a post coming up about that topic).
My suggestion for everyone who wants to be a millionaire (or multi-millionaire) is to grow their careers.
Sure, it’s nice to hear stories about the guy who makes $40k and becomes a millionaire, but the truth is that the vast majority work on the “E” as much (or more) than the “S” or “I”.
Which, BTW, many of the interviews do have a high “I” too (which means they have to have a decent sized “S”. But how many times can you hear “I invested in index funds for 25 years” and get excited about it? That what most of them do.
As for the PAW formula, it’s a decent enough rule of thumb, but it’s been shown to have some gaps.
Here’s and example from my personal experience: we were not considered PAW for many years because:
1) I had a high and increasing income at a relatively young age (and the formula assumes you’ve been at that income for a good amount of time) and…
2) we gave a large portion of our income to charity.
It was only in our older years that we became PAW according to the formula in TMND.
And if you want to know how to become rich on a small income, check this out:
https://esimoney.com/examples-get-rich-small-income/
John says
Just saying that there are a limited number of $250k a year jobs in the world as compared to 50-150k a year jobs. And his story ain’t really that different from yours. What’s the savings rate of $2M dollars over four years that turned into $3.4M over 45? Don’t try to say the savings and investing are brilliant. The reason this person retired well is strictly from a high income.
ESI says
First of all, those incomes you cite are still “average to high”.
Second, and I don’t know if there’s research on this or not, but my guess is that there are way more people who make $250k per year and aren’t multi-millionaires than people who make that and are.
In other words, savings matters and to be successful (as this millionaire is), you must save no matter your income.
Finally, no matter what your field, there are things you can do to increase your income. Most people don’t want to do those and thus do themselves a great disservice.
Paper Tiger says
ESI, I’d also argue that households earning 250K per year still have to do the right kinds of things with “S” & “I” in order to get to millionaire+ status. Unfortunately, most start “living the life” they think they have earned rather than thinking long term.
In simple terms, assume 1/3 of that goes to taxes and 1/3 goes to housing. That leaves you with a little over 80K per year or ~6900 per month. People in this bracket are busy and like to eat out a lot so 1K a month is not unusual. They also like to entertain a lot and show people how successful they are so, add another 1K per month. Add in a couple of nice car payments at 400 each per month, nice clothes at 500 each per month, private tuition for their kids, groceries, gym and country club memberships, etc. and before you know it, they are lucky if they are saving 1K per month.
I know this may seem a bit extreme but I’ve certainly seen this pattern repeated among many of my friends and acquaintances. The point is, no matter how good the income looks, it still takes work, discipline, sacrifice and time to turn income into financial independence.
JimCalf says
Something that I haven’t seen discussed it how long it takes to become valuable enough to demand the high salary. I worked for peanuts (sub 50k) for years, gaining experience and trying to save, but not much left at the end of the month for the piggy bank. I was in my mid to late thirties before I was able to start achieving six figure earnings. 10 years ago at age 44, I only had a networth of 630k, which became 550k in 2008 crash. that was after 20+ years of saving! Something happened though and all my years of experience started to make me much more valuable, leading to management roles that were much more lucrative. My income went from about 110k in 2007 to around 280k today, driven by stock grants and performance bonus’ tied to performance in my management role. The job also got a hundred times harder and more stressful than my individual contributor roles. Managing a global team of 60 engineers isn’t easy, hours are long, but the rewards are worth it to me. The last 10 years have been like booster rockets, allowing me to save like crazy, still living on about 80k. Now my networth is 2.6M, and yes, it was due to me finally getting paid well in my “high earning years”. also known as “the old guy actually knows a lot of stuff now, so let’s put him in charge”. I’ve gradually become the tallest of the pygmys. It doesn’t happen overnight though.
Life’s a beach says
You’ve made some great points JimCalf. Like you, I had to pay my dues a long time before I could get the big salaries. But my wife & l also lived frugally, saved & invested all along the way. As I mentioned in the Q&A, we’ve still got shares that were purchased 15-20years ago like CSCO, AMGN – and one (count’em) share of Berkshire Hathaway. Wow has that ever been a good investment!
So John is right in that without those final four years of high salaries I’d have to still be employed somewhere, but wrong that it’s the only reason we have the wealth we do. We had the S & the I to make this work.
I should also add, I’m starting a small consulting gig tomorrow. $175 and hour and still my own boss. Never hurts to have some xtra cash around the holidays.
ESI says
This is a great example of working at your career over time and sticking with it.
Sometimes the results come fast, sometimes slowly. But you stuck with it and reaped the rewards.
In the meantime you made all the right moves as well.
Well done.
jay says
Good stories. I invest in index funds myself because I don’t know how to analyze individual stocks so much. And right now they are priced high I presume. Any advice on how to learn to invest in individual stocks would be appreciated, or a good book to read. Anyone read the book Buffet read? Drawing a blank on the name at moment. His mentor.
While I work hard and have grown and am now 55, I wasn’t able to increase my income markedly in the past ten years. It seems in my field I have hit the ceiling. That is, I can’t go out and get a higher paying job. I can move into consulting, but it would be hard to make as much that way, but on the other hand it may open up some doors of possibility. An unknown for sure. I want some concrete prospects before that move.
Of course we all have different means with which to live within.
Thanks for sharing.
Gary
Life’s a beach says
Hi Gary – it is indeed challenging to get enough info on a company to be a confident buy of shares. A few thoughts:
– pick 20 (or 40) companies that interest you. Add them to a stock tracking app and follow them. Read the news about them. And earnings reports. And especially, watch the range the share price trades in. Never forget – mArkets and stocks have good & bad days, good & and weeks. Often for no discerable reason.
– when you decide who you like, put in bIds for 5 percent below what you think is 5e right price – the market may come your way. You’ll. It’s a few, but will also be surprised how many you hit.
– don’t be an emotional buyer. Stick with your bids.
Life’s a beach says
“5e below”should be “5% below”
M24 says
Hope you all are in good health & spirits. I’ve really been enjoying the site, and thought I’d add an update on how my wife & I & our wealth are doing since the post in October.
On all counts we are doing well. We’ve hung on into the Trump Bump and our net worth has risen from $3.4M in October to just under $3.8M:
– $600k in after tax cash. Which helps me sleep great.
– $965k in broker account shares
– $1120k in self-managed IRA (55% in AAG, no F or N. 25% in cash & bonds)
– $265k in UK retirement account
-$25k in a friend’s startup
– our house is probably worth about $1.1M. We paid $811k in 2012 and we only owe $248k so if we did sell (we ain’t) we walk away with $800k which is the same value I used last year.
My little consulting gig that I started last October is still going strong. I’m working 45-60 hours a month (not per week!!!) and making $175 an hour and having fun. The only downside is that my income has removed us from receiving tax credits for our Covered California health insurance. Our monthly payment was $210 last year, but it is now $1440. Oh well.
Fortunately we are in great health. We both exercise, and I get the added joy of walking our mutt on the beach everyday. Plus my harmonica playing is improving with increased practice time. There’s a lot to be said for the FIRE lifestyle. Good luck to everybody as we work to achieve and maintain it.
Adios
Richard says
Alright, alright . . . I also live two blocks from the ocean, here in WA state. My house of choice is just under 900 sf. Easy to heat, clean, and maintain; one level, property taxes relatively low. I also have a great interest in music, plenty of equipment, a spare music room and one garage bay free. We should form a BAND man (lol) . . . okay, I know my riffage is often unwanted. Nevertheless, it’s nice to see a more realistic appraisal of some tight job situations, no matter how well compensated. I am plainly working under the umbrella of an enemy, for instance, and yet all my points are set and growing, and I’ve learned to live within. Keepin’ it real . . . lofty vapors and more high fivin’ only takes one so far, and we all share a common end, if not the endgame, far off the Monopoly game board. Absolutely more has to be said about the healthcare challenge, the mother of all, no matter how rich or poor.
M24 says
A band is a ripper of a plan Richard. I prefer 12 bar stuff. And good luck u der your enemies umbrella. But don’t let’em take your dignity. Adios.
M24